BRICS means business, sky’s the limit

Besides the Development Bank, the formation of the Business Council will be a key outcome of the Durban summit.

DURBAN: The BRICS economies, which have
emerged as beacons of growth and hope in times of the global slowdown, are
poised to push the envelope for enhancing intra-BRICS trade and investment –
the master-theme of the BRICS Business Forum that was held in the South African
coastal city of Durban March 26.

The forum will culminate in the
setting up of the 25-member BRICS Business Council March 27, which will
comprise top five business leaders from each BRICS country. It will not be a
talk shop, but a result-oriented permanent structure that will have its own
secretariat and will impart greater economic heft and coherence to the $14
trillion grouping. At the plenary of the summit, the heads of states of BRICS
countries will announce the list of all members of the BRICS Business Council. The
council will meet twice a year. Besides the Development Bank, the formation of
the Business Council will be a key outcome of the Durban summit, the first time
the BRICS summit is being held on the African soil.

Cutting across continents, India,
Russia, China, Brazil and South Africa may not be exactly natural economic
partners, but the congruence of larger strategic interests and the ravages of
the global slowdown have prodded them to bond and deepen their economic
linkages to insulate themselves from the malignant fever of the Eurozone.

The sentiment was upbeat at the
BRICS Business Forum which has brought around 900 leading business leaders from
the five countries to the South African tourist hub in search of win-win deals
and investments. Officially, the leaders of BRICS countries had set the target
for scaling up intra-BRICS trade to $500 billion by 2015.

Given a renewed enthusiasm for
expanding linkages among emerging economies, business leaders participating in
the forum said they were confident that the 2015 target would not only be
achieved but could easily be surpassed. Naina Lal Kidwai, country head, India,
HSBC Bank, has voiced optimism about the trajectory of intra-BRICS economic
cooperation. “There are enormous opportunities for BRICS countries. There is so
much more than can be done in terms of intra-BRICS trade and investment.”

Kidwai said that the business
forum has identified key focus areas of intra-BRICS investment linkages. These
include: 1) Infrastructure II) IT and communication industries III) skills and
training IV) energy and mining V) Manufacturing VI) agriculture. The
discussions, according to Kidwai, focused on creating an enabling environment
to spur trade and investment. This, in turn, entails addressing issues relating
to legal structures, regulatory environment and connectivity.

The industry leaders from
emerging economies have latched on to the BRICS opportunity to shore up their
bottom-line, which has been adversely impacted by the prolonged Eurozone
recession. It was clear from the profiles of captains of industry who are
participating in the BRICS Business Forum. The top brass of leading Indian
companies like the Tatas, Mahindra, Kirloskar and Apollo Tyres have descended
in Durban to network with leaders of top companies of BRICS countries. The CEOs
of Russian giants like Rosatom, Norilsk Nickel and Vnesheconombank are also in
Durban to reap the BRICS dividend.

“It is of great importance for
Russia to increase its trade and investment cooperation with its BRICS partners
and launch new multilateral business projects involving our nations’ business
communities. In Durban we intend to announce the formal establishment of the
BRICS Business Council designed to support that activity,” Russian President
Vladimir Putin said in an interview with the Itar-Tass news agency.

In his remarks ahead of the
summit, Indian Prime Minister Manmohan Singh projected the Durban summit as an
opportunity to “discuss ways to revive global growth and ensure macroeconomic stability,
as well as mechanisms and measures to promote investment in infrastructure and
sustainable development."

Defying the recessionary trends,
Russia remains an attractive investment destination, the business leaders of
India and China said. IT, communications industry, wholesale and retail
trade and infrastructure have been identified as key opportunities for BRICS
investors in Russia. In China, new opportunities for investment have emerged in
areas like automobile using new energy sources, environmental protection
industry, high-end equipment manufacturing industry and new materials industry.

Underlining the new synergy
developing among BRICS countries, India’s Commerce and Industry Minister Anand
Sharma said South African companies can play a major role in India's plans to
pump $1 trillion over the next five years in infrastructure development. “India
is rolling out massive developments touching rail, road, telecoms, power and
airport infrastructure. This makes for a perfect opportunity to increase trade
and investment between the two nations and by extension, within the BRICS
establishment," he told The New Age, a South African daily.

Sharma also stressed that BRICS
member states were positioned to complement and learn from another. In the same
breath, he, however, stressed that it was important to recognize the unique
socio-economic circumstances confronting each of them.

Bridging knowledge and
information deficit about business environments and opportunities will,
therefore, be a critical factor in cementing and expanding intra-BRICS economic
architecture. The Business Forum in Durban has set the stage for a marked
acceleration of intra-BRICS trade and investment. The council has agreed on a
plan that will include frequent visits by businessmen from one BRICS country to
another. In a mutating world order marked by the rise of emerging powers and
the shift of power from the West to the rest, economics will hold the key to
the future of the five-nation grouping that account for more than a quarter of
global GDP. In the end, the business of diplomacy is business, and it is this
key yardstick by which the success of the BRICS grouping will be judged.

The writer is Editor-in-Chief of India Writes. He is in Durban to report and
analyse issues and outcomes of the 5th BRICS summit